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Physician Bonuses

HPSA Designations

The Health Resources and Services Administration (HRSA) published an updated Federal Register Notice on June 27, 2013, that contains important information about new and withdrawn HPSA designations. For purposes of the Medicare Physician Bonus and the Medicare Surgical Bonus programs, changes in designation status are effective for dates of services on and after January 1 of the year following the designation date. Therefore, areas whose designation is shown as “Withdrawn” on the June 27, 2013 Federal Register list, remain eligible for the HPSA bonuses through December 31, 2013. Providers can review the latest HPSA designations on the HRSA website at http://bhpr.hrsa.gov/shortage/shortageareas/index.html

MMA Section 413(b) required CMS to revise some of the policies that address HPSA bonus payments. Section 1833(m) of the Social Security Act provides bonus payments for physicians who furnish medical care services in geographic areas that are designated by the HRSA as primary medical care HPSAs under section 332 (a)(1)(A) of the Public Health Service (PHS) Act. In addition, for claims with dates of service on or after July 1, 2004, psychiatrists (provider specialty 26) furnishing services in mental health HPSAs are also eligible to receive bonus payments. If a zip code falls within both a primary care and mental health HPSA, only one bonus will be paid on the service.

MMA Changes

Effective January 1, 2005, a modifier no longer has to be included on claims to receive the HPSA bonus payment, which will be paid automatically, if services are provided in ZIP code areas that either:

  • Fall entirely in a county designated as a full-county HPSA; or
  • Fall entirely within the county, through a USPS determination of dominance; or
  • Fall entirely within a partial county HPSA.

However, if services are provided in ZIP code areas that do not fall entirely within a full county HPSA or partial county HPSA, the AQ modifier must be entered on the claim to receive the bonus.

The following are the specific instances in which a modifier must be entered:

  • When services are provided in ZIP code areas that do not fall entirely within a designated full county HPSA bonus area;
  • When services are provided in a ZIP code area that falls partially within a full county HPSA but is not considered to be in that county based on the USPS dominance decision;
  • When services are provided in a ZIP code area that falls partially within a non-full county HPSA;
  • When services are provided in a ZIP code area that was not included in the automated file of HPSA areas based on the date of the data run used to create the file.

To determine if a service will automatically qualify to receive the bonus payment, review the information provided on the CMS Web site.  The HRSA website should be reviewed for the most recent designations.  Physicians may also use the HRSA website designations when making the decision on whether or not to include the HPSA modifier on their claims.

Some points to remember include the following:

  • Medicare contractors will base the bonus on the amount actually paid (not the Medicare approved payment amount for each service) and the ten-percent bonus will be paid on a quarterly basis.
  • The HPSA bonus pertains only to physician's professional services. Should a service be billed that has both a professional and technical component, only the professional component will receive the bonus payment.
  • The key to eligibility is not that the beneficiary lives in a HPSA nor that the physician's office or primary location is in a HPSA, but rather that the services are actually rendered in a HPSA.
  • To be considered for the bonus payment, the name, address, and ZIP code of the location where the service was rendered must be included on all electronic and paper claim submissions.
  • Physicians should verify the eligibility of their area for a bonus before submitting services with a HPSA modifier for areas they think may still require the submission of a modifier to receive the bonus payment.
  • Services submitted with the AQ modifier will be subject to validation by Medicare.

Provider Center

For a one-stop resource web page focused on the informational needs and interests of Medicare Fee-for-Service (FFS) providers, including physicians, other practitioners and suppliers, go to the Provider Center (see under "Related Links Inside CMS" below).

Affordable Care Act of 2010 Changes (New for January 2011 for the HSIP Bonus)

The Affordable Care Act of 2010, Section 5501 (b)(4) expands bonus payments for general surgeons in HPSAs.  Effective January 1, 2011 through December 31, 2015, physicians serving in designated HPSAs will receive an additional 10% bonus for major surgical procedures with a 10 or 90 day global period.  This additional payment, referred to as the HPSA Surgical Incentive Payment (HSIP) will be combined with the original HPSA payment and will be paid on a quarterly basis.  Modifier AQ should be appended for these major surgical procedures similar to claims for the Medicare original HPSA bonus when services are provided in ZIP code areas that do not fall entirely within a full or partial county HPSA.

Some points to remember:

  •  The current HPSA physician bonus program requirements will remain intact.
  • Medicare contractors will identify and pay the additional bonus on eligible services rendered in eligible ZIP code areas based on the HPSA ZIP code file as of December 31st of the prior year.
  • Medicare contractors will calculate the bonus amount based on the amount actually paid for the service, not the Medicare approved amount
  • Services submitted with modifier AQ will be subject to validation by Medicare.